Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economics and Planning Unit (EPU-Delhi)


Chetty, V. K. (EPU-Delhi; ISI) | Dasgupta, Dipankar (EPU-Delhi; ISI)

Abstract (Summary of the Work)

The prime concem of economist: traditionally has been the system of markets and their role in rasource allocat on. Walrasian equilibrium theory, which is believed to províde an ajequate framework for resource allocation through markets, has been extensively analysed in the recent past. At the sane time, it has been realined, mainly throunh Keynesian influence, that the market machanism is prone to failures, DOwnward Inflezibility of wages is an obvious example of this. It is further possi that a central authority concerned with improving general welfare may tamper vith the market mechanism or do away with it altoer.Thered ar three types of non-market distribution schemes which require varving degrees of intervention. The first one is simal mechanismn, ike taxation or rationing. In taxat ion, taxes are used as sirn In quantity rntioning, maximum tradeable or consumable quintities are used as signals. Under points rationing, prices in the different rationing currencies are used as signals, The serond type of distribution schemes involves arbitration schemes like Shapley value described in [143 or a minimak rule described in [3) for coalition production economies Third type involven lim p sun tranafor oF res-urces.The third type scheme is possible only under exceptional elremacanens, The neoond tvpe han not sn far been applled on * Iarge sonin. timat mechaniaan itke taxat lon and ratloning heve been tried rn a largo scale and desorve to he analysad in n penerat frwmork. In thia xturty u nnalyoe ratiloning vith the halp of sInch franework.The tncixinn prebism of a singte consuner faond vith the rat loning atrainte han heen atvent by Saaelsan (151 and Tabin (161. Sone existenen thunrami iowotving quantiry restrie- tion hm entty beun prend by Tre and thia stedy procneds in n sinl lar arner. A tew tynamle nacro-eonnoede nolels ean ha found in the vorks of Rarro and Gronsun (2, 8).An importint case of market failur is when a prioe system prevail in the econory at which the supply doeR not equal demand. If this disoquilibriım sitnation is more than just temporary, it becones imperative to lngk for solution concepts to nxpinin thin pheremenon nnd possibly to help solve the prohlee of alloc-tion, Dreze impnsen quantity restrictions to supprens the imbalanee betreen supply and demand. When the Inihalatiea betrenn Rupply and demand at given prices is not contrived this notel provides a framework for Keynen lan type of price rigiditten. When the oituation is contrived 1.e. when the prices re puriosely fixad, the sare model Is a suitable tool tn anniyee mutioning.There are instances in the real world when a commodity in excese denand gets rationed on a voluntary hanis. Queues are voluntarily formed for a scarce commodity 1ike space in a bus. Retailere of a sonree cood like cinema tickes often restrict the amount they s1l per hend. This kind of ecentralized rat-oning, honawr, may not he widosprend, Cven 1r it is, the restrictions era net likly to he uniform over time and space.


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